rccRockwater Announces Second Quarter Results
8/12/03
TORONTO, Aug 12, 2003 (Canada NewsWire via COMTEX) --
Rockwater Capital Corporation ('Rockwater') released today its unaudited consolidated results for the three months and six months ended June 30, 2003. Rockwater recorded earnings of $415,000 before amortization of capital assets and deferred employment arrangements in the second quarter compared with a loss of $515,000 in the first quarter of 2003. After taking into account these non-cash charges of $2.2 million, the loss for the second quarter was $1.8 million ($0.01 per share) on revenue of $24.2 million compared to a loss of $2.9 million ($0.03 per share) on revenue of $20.9 million in the first quarter of 2003. Results for the first and second quarter of 2002 are not considered comparable to previous years' results as they represent activities prior to Rockwater's change in strategic direction in the summer of 2002. Since that time, Rockwater has completed numerous acquisitions and financings, capitalizing on opportunities in Canada's financial services industry.
'We continue to make significant progress toward our objectives,'said Robert Schultz, Chairman of Rockwater. 'With our revenues now annualizing at over $96 million - a 16% increase over the first quarter, we are well on our way to reaching our goal of $100 million in annualized revenues by year's end. We have also been successful in containing our expenses resulting in earnings of $415,000 before amortization costs. Simply put - our growth strategy remains on track.'
'As market conditions improved in the latter part of the second quarter, we began to see the revenue benefits of our expanding team of investment professionals,'said Bill Packham, President and Chief Executive Officer of Rockwater. 'Through a continued focus on growth opportunities in Canada's under-served mid-market, our Capital Markets business increased revenues by 85% over the first quarter to over $2.4 million. Our Wealth Management business also improved its top line results with revenues increasing by 11% over the first quarter to $19.7 million. As Bob indicated - we are clearly on track. We are very pleased with our progress and are excited about what lies ahead for Rockwater and First Associates.'
Rockwater Capital Corporation (TSX:RCC) is a unique financial services firm that is building the leading independent investment management alternative in Canada. Rockwater serves individual, corporate and institutional clients through its operating subsidiaries First Associates Investments Inc., a full-service investment dealer and member of the Investment Dealers Association of Canada, and Rockwater Asset Management Inc., an Investment Counseling / Portfolio Management firm registered through the Ontario Securities Commission.
Rockwater Capital Corporation Interim Consolidated Statements of Loss and Deficit (Unaudited) (in thousands of Canadian dollars, except per share amounts)
For the three For the six months ended: months ended: ----------------------------------------------------- ------------------- ----------------------------------------------------- ------------------- June 30, March 31, June 30, June 30, June 30, 2003 2003 2002 2003 2002 ----------------------------------------------------- ------------------- ----------------------------------------------------- -------------------
REVENUES
Commissions $ 16,774 $ 15,249 $ - $ 32,023 $ -
Asset management and account fees 1,865 1,740 - 3,605 -
Investment banking 1,421 188 - 1,609 -
Principal transactions 701 996 - 1,697 -
Interest income, net 1,947 1,877 - 3,824 -
Investment income, net - - 391 - 1,523
Other 1,477 839 - 2,316 - ----------------------------------------------------- -------------------
Total Revenue 24,185 20,889 391 45,074 1,523 ----------------------------------------------------- -------------------
EXPENSES
Compensation and benefits 15,372 13,952 221 29,324 573
Communications and technology 1,505 1,391 5 2,896 11
Occupancy 2,032 2,071 139 4,103 240
Brokerage, clearing and exchange fees 2,926 1,824 - 4,750 -
Professional services 587 612 20 1,199 120
Business development 444 321 11 765 15
Office supplies and postage 497 648 17 1,145 35
Other 407 585 17 992 94
Restructuring provision - - - - 1,200
Loss on investments - - 462 - 810 ----------------------------------------------------- -------------------
Total expenses before amortization 23,770 21,404 892 45,174 3,098 ----------------------------------------------------- -------------------
Earnings (Loss) before amortization, non-controlling interest and income tax recovery (provision) 415 (515) (501) (100) (1,575) ----------------------------------------------------- -------------------
Amortization of capital assets 296 215 2 511 6 Amortization of deferred employment arrangements 1,929 2,747 - 4,676 - ----------------------------------------------------- -------------------
Loss before under-noted (1,810) (3,477) (503) (5,287) (1,581) ----------------------------------------------------- -------------------
Non-controlling interest - - 130 - 281
Income tax recovery (provision) - 538 (11) 538 (26) ----------------------------------------------------- -------------------
Loss for the period $ (1,810) $ (2,939) $ (384) $ (4,749) $ (1,326) ----------------------------------------------------- -------------------
Deficit, beginning of period (43,065) (40,126) (30,875) (40,126) (29,933) ----------------------------------------------------- -------------------
Deficit, end of period $(44,875) $(43,065) $(31,259) $(44,875) $(31,259) ----------------------------------------------------- -------------------
Loss per common share Basic and Diluted (0.01) (0.03) (0.01) (0.04) (0.04) ----------------------------------------------------- ------------------- ----------------------------------------------------- -------------------
Note: Certain comparative figures have been reclassified to conform with current period presentation.
ROCKWATER CAPITAL CORPORATION Supplementary Data (Unaudited) -------------------------------------------------------------------------
Description Information -------------------------------------------------------------------------
Assets under administration(1) $4.1 billion
Full-time employees(1) 509
Private Client Group Investment Advisors(1) 194
Book value per share (including special warrants)(2) $0.43 -------------------------------------------------------------------------
Capital Stock - as at June 30, 2003
Common shares issued and outstanding 155.5 million
Special warrants issued and outstanding 1.2 million
Number of shares and special warrants issued and outstanding 156.7 million
Shares reserved for issuance to employees 13.0 million ------------------------------------------------------------------------- Number of shares and special warrants issued, outstanding and reserved 169.7 million -------------------------------------------------------------------------
(1) As at July 31, 2003 (2) As at June 30, 2003